A new chapter is being added to the ongoing Kochtopus saga. On March 1 the Washington Post, in a story[3] sure to fill the airwaves for the weeks and months to come, revealed the Kochtopus[4] is suing the Cato Institute for control of the recently deceased and former Cato Chairman William Niskanen[5]'s ownership share in the think-tank.

At the heart of the dispute is the fate of the shares owned by Niskanen, who died in October at age 78 of complications from a stroke. The Koch brothers believe that they have the option to buy Niskanen’s shares, while Cato officials believe that the shares belong to Niskanen’s widow, Kathryn Washburn, according to the complaint.

The name “Cato Institute” came from[19] “Cato's Letters[20],” which Wikipedia explains were “essays condemning tyranny and advancing principles of freedom of conscience and freedom of speech, [and] were a main vehicle for spreading the concepts that had been developed by [political theorist] John Locke[21].”

Often left out of the Cato historical discussion, though, is another key libertarian economist, political theorist, historian and former good friend of Charles Koch[22]: Murray Rothbard[23].

He thought that Cato's primary mission should be scholarship rather than political campaigns and attempts to secure audiences with the high and mighty in Washington. His antagonists emphatically disagreed

…Koch could not tolerate what they deemed blatant disloyalty. Even though Rothbard was the leading theorist of libertarianism and the Cato Institute had been established to promote his views, they expected him to obey the orders sent down from on high.

(Snip)

After Rothbard departed from Cato, he joined forces with the Mises Institute, established in 1982 by Lew Rockwell. The new group was a standing reproach to Koch…since its consistent defense, encouragement, and development of a Rothbardian program were exactly the program that the Cato Institute had betrayed. The Koch forces endeavored to strangle the new group in its cradle.

The main difference between the Rothbardian crowd and the Koch crowd boils down to support for a pure free market vs. what the Rothbardian crowd calls a “corporatist[33]” market.

The push for the new corporate state was generated by an alliance between corporatist big-business groups and technocratic intellectuals, eager to help run and to apologize for the new system, which promised them a far plusher niche than did a freely competitive economy.

Perhaps it is no surprise after writing articles with passages like these that Rothbard and the Austrians were exiled from the Kochtopus network.

“I have strong ideas,” Koch…[said in an interview]. “I want to see things go in a certain direction, and Crane has strong ideas. I concluded, why argue with Ed? Rather than try to modify his strategy, just go do my own thing, and wish him well.”

That was what happened. Koch took his money to other foundations. Crane kept building Cato. Contact was severed; in a 2010 interview, Crane told me that he never quite understood why Koch bolted.

Twenty years later, Charles Koch and his brother David are resurfacing in the Cato world, but the conflict rages on.

The common theme to its AFP front group efforts: sheer corporatism, with a well-lubed GOP machine through which to push its corporate agenda at both the federal- and state-level.

Having funded and turned AFP into a powerful national political animal, the Kochtopus Cato power grab was a logical progression.

“Mr. Koch's actions in Kansas court yesterday represent an effort by him to transform Cato from an independent, nonpartisan research organization into a political entity that might better support his partisan agenda,” said Crane[45] of the lawsuit.

“This is an effort by the Kochs to turn the Cato Institute into some sort of auxiliary for the G.O.P.,” said Edward H. Crane, who is president of Cato and co-founded it with Charles Koch. “What he is doing now is detrimental to Cato, it’s detrimental to Koch Industries, it’s detrimental to the libertarian movement.”

There is some irony in the fact that Rothbard left Cato because he felt Crane and Koch had abandoned true Austrian School of Economics libertarian principles, and now Koch is taking it to a new extreme, desiring to transform Cato into a mere tentacle of the AFP political machine.

Coming full circle, it could be said that Rothbard has been vindicated after all.

Cato Employees Peeved and Ready to Fight

Cato will not go down without its guns blazing. Many high-ranking employees[48] other than Crane have come out with strong statements against the Koch maneuver. A “Save Cato” Facebook[49] and Twitter[50] account have also been created.

“…I can’t begin to understand why Charles and David Koch have chosen a course of action that, if successful, would carelessly, pointlessly, and grievously injure the cause I thought they were fighting for.”

“…the Kochs' actions here have demonstrated they have no interest in maintaining it. Cato as a name will be irreparably damaged…and they'll have to start poaching Right-wing shops to fill the vacancies left by the resignations of people who refuse to associate themselves with this naked power grab.”

Julian Sanchez[55], a Cato Research Fellow, went so far as to write a “Preresignation Letter” on his website, saying that if the Kochtopus wins the lawsuit, it's “game over” for him at Cato. He stated[56],

“I hereby tender my pre-resignation from Cato, effective if and when the Kochs take command. I’ll be sad to go, if it comes to that, but sadder to see a proud institution lose its autonomy.”